Facing pressure from Beijing, Putin brings in European political and business forces to help Russia help Vietnam extract oil in the South China Sea

Former French Prime Minister Francois Fillon, who was sentenced in a corruption scandal, recently joined the board of directors of Russia’s Offshore Oil Corporation. The state-owned energy giant’s main business is focused on the South China Sea. Russia is facing Chinese pressure to help Vietnam exploit its oil and gas resources there. With Fillon on board, it will be interesting to see if Putin will use the power of European politics and business against Beijing.

Former French Prime Minister as Director, Kremlin Grows Lobbying Power

Former French Prime Minister Francois Fillon has become a member of the board of directors of the state-owned energy giant, according to the official website of Russia’s Offshore Oil Corporation. Fillon is currently the only foreign director, while the other directors are mostly senior deputy ministers from Russia’s finance and energy sectors. Russian Prime Minister Mishuskin signed a decree on June 10 nominating Fillon to become a director of the company. Media reports indicate that Fillon’s appointment was confirmed in late June.

Putin’s administration has for years regularly paid high salaries to invite retired European dignitaries to join the boards of several Russian energy giants, including Rosneft and Gazprom. These retired European dignitaries have thus become an important lobbying force serving the Kremlin’s interests. Former German Chancellor Gerhard Schröder and former Austrian Foreign Minister Friedrich Kneisel, who are known for their pro-Russian stance, are currently leaders or directors on the boards of these Russian energy giants.

Former Austrian Foreign Minister Kneisl invited Putin to his wedding during his 2018 term, and Putin danced with Ms. Kneisl at the wedding reception. Although the Nord Stream-2 gas pipeline project, which is being pushed by Putin’s administration to bypass Ukraine and reach Germany via the Baltic Sea, has attracted opposition and even sanctions from many countries, there has been strong support for the project in Germany, which is believed to be closely related to the Kremlin’s efforts to cultivate lobbying power over the years. . But some analysts believe that the growing lobbying power at the Kremlin’s service is also threatening EU unity.

Unlike other cases, the companies that joined the alliance focus on the South China Sea

However, Fillon’s membership in OOCL is different from other cases involving former European dignitaries, because OOCL’s main business is concentrated in the South China Sea region.

OOCL, which is 100 percent owned by the Russian government, was formed by the Soviet government in the 1960s to help some of its allies exploit oil and gas resources in Asia, Africa and Latin America. After the collapse of the Soviet Union, the company’s operations shrank considerably, but the company’s main and most critical business is helping Vietnam exploit oil and gas resources in the South China Sea region.

China pressures Fillon to help Putin

However, Russia’s activities in the South China Sea region are facing pressure from China. Russian media reported in May that Rosneft, another Russian energy giant, had decided to withdraw from Vietnam and resell all of its oil and gas exploration operations in the South China Sea region to Overseas Oil Company, which was seen as a way to avoid pressure from Beijing. This is believed to be an attempt to avoid pressure from Beijing.

“Some of Rosneft’s oil and gas fields in the South China Sea happen to be located within China’s nine-dash line, which has led to Chinese discontent. But unlike Rosneft, which has many operations in China, OJSC has no ties with China at the moment. Some analysts in the Russian energy market believe that it remains to be seen whether China will turn its attention to OOCL and continue to exert pressure after Rosneft’s withdrawal.

It is in this context that Fillon became a director of OOCL. But the extent to which the European political and business forces will be able to help Putin’s authorities resist pressure from Beijing and how Putin will use this lobbying force is still unknown. “Overseas Oil Corporation has already started to get involved in the clean energy sector, as it has decided to invest heavily in a joint venture with two Belgian companies to build a large wind power facility off the coast of Vietnam.

Russia will stick to the South China Sea and expand its local business

After the 1979 armed conflict on the Sino-Vietnamese border, the Soviet Union’s military presence in Vietnam was significant, with the Soviet Navy forming a detachment fleet in Cam Ranh Bay and stationing strategic bombers. It was at that time that the Soviet Union initiated the development of oil and gas resources in the South China Sea, and in 1981 the Overseas Oil Company entered Vietnam and formed a joint venture with Vietnam. “The joint venture now accounts for one-third of Vietnam’s national oil production, the company said. After the collapse of the Soviet Union, the joint venture even became the most profitable joint venture in Russia at one time.

“Overseas Oil also has a small presence in the Balkans, Cuba and other places, but the company is trying to continue to expand its activities in the South China Sea region. In addition to Vietnam, the company is developing energy cooperation with Indonesia, another country in the South China Sea region.

Hundreds of Offshore Oil Company engineers are currently working in the South China Sea to help Vietnam extract oil. In the southern Vietnamese city of Tourdon, a large area has a Russian-language school for Russian oilmen, homes and various other amenities, all guarded by Vietnamese security guards.

Some analysts say that despite Chinese pressure, Russia will not necessarily give up its long-standing interests in the South China Sea region. According to Kanayev, an international scholar familiar with local affairs, Russia would prefer to maintain the status quo in the South China Sea region.

It can be said that Russia has a lot of commercial interests in the South China Sea region,” Kanayev said. This is evidenced by the joint exploitation of oil and gas resources with Vietnam. It also shows that Russia does not want any instability there, because that would cause serious damage to Russian interests.”

French political celebrity deeply friends with Putin but criticized for corruption

Fillon served as France’s prime minister under President Nicolas Sarkozy from 2007 to 2012. He was once favored to win the French presidential election in 2017. But Fillon later lost the election due to a corruption scandal. Fillon was accused of using his position to get his wife an assistant position in parliament, but that was only a titular position while he was actually paid. Fillon was sentenced and fined last year and banned from running for office for 10 years.

After the corruption scandal festered, Fillon quit politics and set up his own consulting firm. It was during his tenure as French prime minister that Fillon is believed to have developed close ties with Putin. In recent years, Fillon has had close ties with Russian political and energy circles. At the recent St. Petersburg Economic Forum, Fillon was even more active in helping the Kremlin speak out, calling on the West to lift sanctions against Russia.

Putin said in February this year that he had received an important European visitor late one night. Because of the epidemic, Putin often communicates with his subordinates and staff members by video. When the Kremlin organizes some meet-and-greet events with Putin, many people, including interviewers, are quarantined in advance. But Putin met with this visitor late at night at this time, so it is clear that Putin has important matters to discuss with this person in depth. The Russian newspaper “Kommersant” later reported that the important visitor who arrived in Moscow was Fillon.

In an interview with Ukraine’s TV channel 5 a few days ago, former Lithuanian President Grybauskaitė criticized the fact that retired European dignitaries such as Fillon are now working for the Kremlin as a form of corruption in disguise, and that EU members should be ashamed of this. This, she said, further deprives the West of a moral basis in values when dealing with some countries in the former Soviet region that have gone overboard toward democratic institutions.